Borg Manufacturing: Taking charge

Upholding Australia’s proud manufacturing tradition, kitchen panel specialist Borg Manufacturing has found success by keeping all processes in house – from material sourcing through to final mile delivery.

With much of the manufacturing debate in Australia focusing on the imminent departure of the local car making industry, the success stories written outside the limelight often go unnoticed.

Yet, according to a 2014 report by the Australian Workforce and Productivity Agency, higher value-added, technologically advanced production is still able to make a notable contribution to the domestic economy – opening a “window of opportunity” for local businesses to succeed even in a time of waning capital investment.

Borg Manufacturing, for example, is one local manufacturing business that has managed to buck the trend and continue to grow in an otherwise stagnant economic environment. With three large plants in New South Wales and a network of branches and warehouses around the nation, it represents a new generation of ‘smart’ companies that succeed by offering value-added services in niche markets with a high degree of specialisation.

Focusing on the production of panels and components for the kitchen industry, it is, in fact, so successful that it was able to create its very own transport division to take care of the logistical challenges that come with orchestrating a nation-wide organisation. At the moment, the company-owned fleet counts some 155 vehicles, with around a third performing line haul work and more than 100 rigids on local and regional delivery duty.

Each vehicle is part of a complex just-in-time supply chain, with orders often going out within a single business day.

To ensure maximum efficiency, Managing Director, Michael Borg, says each department is acting like a separate entity. “Each division is responsible to meet certain parameters and work as cost-effectively as possible. Our experience has shown this can be extremely motivating and good for our overall performance.

“As such, our transport department is run like any other transport operation, so we don’t run empty, for example. If we can’t get a backload, we’ll use a sub-contractor instead. A lot of people say it can’t be worth running our own truck fleet, but with our model, we actually make money, so we must be doing something right.”

According to Michael, who has built up the company alongside his brother John, keeping full control of all business processes from start to finish has been key to giving the family operation a competitive edge – especially on the logistics front. Most recently, he says the focus has been on streamlining Borg’s final mile delivery processes, an especially complex transport task that can involve each truck making up to 30 drop-offs a day.

“We believe medium-duty rigid trucks are the right choice for the short-haul work we do as they give us the best mixture of flexibility and load volume,” the hands-on executive explains. “We also run articulated vehicles on long-haul duty, but what happens locally is where a lot of time and money can be won or lost. That’s why it’s important to make sure our final mile fleet is always kept up-to-date.”

Michael says closely observing technological developments in the transport equipment market is key to a successful procurement policy. For example, when Japanese brand UD Trucks, part of the global Volvo Group, recently announced the launch of a locally developed PD 6x2 ‘Condor’ model with a factory-fitted lazy axle, he didn’t hesitate to act: “We had been using UD equipment in our short-haul fleet for some time when the new model was announced, so it caught my attention straight away,” he says. “We’d been using a similar set-up before, but with a locally fitted lazy axle. Having the same spec as a factory option was intriguing, so I wanted to get in early and secured us the complete first batch coming out of Japan.”

The 10 units arrived at Borg’s Sunshine branch in Victoria in early December and went straight into operation, Michael says. Powered by UD’s seven-litre GH7 engine – boasting some 280hp at 2,500 rpm and 883Nm of torque at 1,400rpm – they now service the metro Melbourne area, as well as regional centres such as Bendigo, Ballarat and Geelong.

All of the new rigid trucks are fitted with the latest series six-speed Allison automatic transmission, as finding young drivers who can capably handle a manual is getting increasingly difficult, he adds – with the added bonus of achieving a stable fuel economy.

On the suspension front, Michael says he opted for a full airbag set-up to ensure the company’s heavy, yet sensitive cargo will remain unharmed en route. “When we specify equipment, we need to look after the cargo first, but also ensure we keep the vehicle as light as we can for maximum payload. Achieving all that without compromising reliability is where UD has been traditionally strong.”

In fact, he says the UD brand has proven to be “almost bullet proof”, with hardly any problems to report after three years of using it. “Another attraction to the UD product is its use of Selective Catalytic Reduction (SCR) exhaust emission technology, which avoids any issues with components such as particulate filters,” he says. “The simple act of topping up the 50-litre AdBlue tank when refuelling is all that is required and no time can be lost due to having a filter that may need a manual burn. To us, that’s a real competitive advantage.”

Michael adds the 14-pallet bodies on the back of each Condor have been built by Victorian family business Vawdrey Australia – again with “heavy involvement” of the Borg team, which asked for all centre roof post supports to be waived and a design so the sliding track for the curtains can be replaced without removing the roof.

“We now also use quick release curtains with Razor motors so there are no buckles for our people to deal with, which will speed up our delivery processes dramatically. If we can save five minutes on each drop and do 15 drops a day per truck, it’s a significant saving in time and money,” he adds.

In combination with the transmission choice, he says such details play a crucial role in driver retention. “Getting drivers, training them and keeping them is a real challenge nowadays. That’s why we put a lot of work into training them properly – and if we can make their life easier by opting for a certain truck spec, we’ll do that as well.”

According to Michael, the UD cab is a case in point. “The Condor series is well known for its ergonomic cabs, which feature air-suspended driver seats, SRS airbags, seatbelt pre-tensioners and a number of tech features to keep the driver updated on their performance. Our drivers appreciate those features as a sign of trust and appreciation,” he says. “I truly believe buying the right truck to keep the team happy and motivated will pay off for the business.”

Next to retaining positive relationships with his clients and his hundreds of staff, Michael says keeping close to key suppliers is equally important to run a future-proof business. “If I enter into a business relationship with someone, I want to be sure they give us the right advice in relation to the equipment we need – be it in terms of diff ratios or driver comfort,” he says. “Solid communication is especially important in that context, and UD is one of those companies that has managed to stay in touch and keep us updated over a long period of time. To me, that’s what a successful partnership should look like.”

With the demise of Australian car making in mind and the Turnbull Government fervently trying to re-start the nation’s innovation engine, Michael says the best advice he can give is to retain a big picture view and take control of those business areas that can be actively controlled – regardless of what else is happening in the economy.

“For us, that means taking care of all processes in house, making sure we can produce just-in-time to a very specific quality standard. Of course we could outsource some elements of that, but we want to be in charge of our own destiny and add value where we can,” he explains.

“The kitchen industry is said to be recession proof – in good times, new house and apartment construction creates demand for new kitchens, and when things are tight, home owners still renovate existing premises. But that doesn’t mean we can rest on our laurels. We need to keep innovating and make use of the opportunities we see. For us, that also involves taking charge of our transport needs, right down to the equipment we want to see used.”